Commodity Groups Respond to Negative Editorial

The NCC recently led a group of commodity organizations in responding to a misleading Wall Street Journal op-ed entitled, “Harvesting Crop Insurance Profits.”

Published: January 16, 2015

Updated: January 16, 2015

The undersigned organizations representing farmers across the U.S. strongly disagree with the assertions put forth in the recent article entitled "Harvesting Crop Insurance Profits." The title alone is misleading as crop insurance indemnities are not profit, but like all insurance policies, only occur when the farmer has incurred a loss. Each insurance policy has a deductible, or initial loss ranging between 15 and 50 percent, for which the farmer receives no compensation. The insurance products referenced are revenue insurance products, and as any business person knows, revenue does not equal profit. Crop insurance only mitigates losses. The first line of the article further misleads the reader by implying the program costs taxpayers $80 billion per year. Instead, government outlays are roughly $8 billion per year, but when coupled with farmer-paid premiums, the public-private partnership provides risk management protection for more than $100 billion annually in crop and livestock production. Crop insurance products were improved in the recent farm bill because Congress recognized that these products are a necessity for farmers, regardless of size. In recent years, farmers across the country have suffered from historic droughts as well as floods and other 'acts of God' - yet at no time has there been any ad hoc disaster assistance because the federal crop insurance program has been there to assist farmers in times of need. The volatility of weather and commodity markets necessitates government assistance with premiums so that U.S. agriculture has access to affordable and dependable crop insurance products.